Current Medicaid Policy Reform

Current Medicaid policy should be streamlined to benefit the states. Medicaid is operated jointly by the federal and state governments. Costs for the program are also shared jointly, with states assuming about one-half of the financial responsibility. States encounter difficulty in trying to cope with the administrative and financial demands of the federal government's outdated health care philosophy. Federal restrictions on eligibility often hamper the states' ability to provide services to indigent residents. Interstate differences in eligibility can result in a shift of low-income residents to high-benefit states. Unequal tax burdens and rising Medicaid costs have placed some states in fiscal distress. Clearly, the Medicaid program is ripe for a major overhaul, a task that the federal government has thus far been unwilling to undertake.

From its inception in 1965, the Medicaid program (Title XIX of the Social Security Act) was "relatively ill-designed, its future vague" (Stevens, 1974, p. 51). Medicaid became the country's most far-reaching attempt at "socialized medicine." The program's intent was to provide medical services to needy American citizens. Medicaid supplemented the Medicare program (which covered the elderly only) by filling in service gaps for impoverished elderly Medicare recipients.

The philosophy behind the provision of medical services to the poor was that, ideally, the public should be able to pay for medical care from their own pockets much t

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ucture of the program itself. A substantial number of persons living in poverty are ineligible for the program. To qualify for Medicare a person must be aged, blind, disabled, or residing in a family receiving AFDC payments. This eligibility definition excludes the able-bodied, working poor whose employers do not provide health insurance. Ironically, some persons whose incomes fall under the federal poverty level are ineligible for Medicaid because the state in which they reside uses income categories that differ from federal regulations. The differences between eligibility and benefits varies widely from state to state. Even adjusting for cost of living variations does not account for the gross inequities: "The unequal eligibility criteria imply that Medicaid is characterized by horizontal inequity (that is, treats similar people in similar circumstances unequally) and fails to allocate its resources to the most needy" (Granneman and Pauly, 1983, p. 23). These differences in eligibility create incentives for low-income persons to move to states that offer the most generous benefits. This in-migration of large groups of impoverished residents can have adverse economic effects both on the states and on the interstate migrant

Category: Medical - C